Courier Services Benchmarking Shows Up Rate Discrepancies


“Courier Services is a surprisingly complex spend category to manage as the devil (and delivery of savings!) is in the detail,” benchmarker Purchasing Index (PI) MD Alan Low, told SmartProcurement. ” We regularly benchmarks domestic courier rates across organisations from a variety of industry sectors…

and Rates from courier companies vary dramatically.”  The charts below reflect the variation between the lowest and the highest costs including the fuel levy recorded in PI’s courier report of May 2008.

The rates also reflect that it may be cheaper for users to opt for a faster service (i.e. delivery next morning rather than next afternoon), as the earlier service is more widely used.  “Understanding market rates and cost drivers before a supplier is chosen, can ultimately make a significant difference to an organisation’s costs” Alan Low, Managing Director of PI, explained to SmartProcurement.

Fuel Levy
Fuel levies, which are changing on a monthly basis as a result of regular fuel price fluctuations, varied from a low of 20% to a high of 36%, highlighting the need to baseline fuel calculations correctly and understand precisely what goes into a courier company’s costs.

The internal usage of courier services can often be dramatically improved with such measures as proper guidelines on usage, amalgamation of letters and parcels to the same destination, etc.  “Many courier and facilities management companies now offer mail room management services and this can be a cost effective option if there is limited internal capacity”, Low concluded.

Alan Low can be contacted on the details below:
Telephone:  +27 11 803 0005
Cell:  +27 84 890 0005

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